The Honourable Senator Peter Harder, Government Representative in the Senate

April 5, 2017

Nunavut—Carbon Tax

Hon. Dennis Glen Patterson: I have a question for Senator Harder.

I’ve just come back from the Nunavut Mining Symposium, where a great Canadian gold company headquartered in Toronto, Agnico Eagle, gave a welcome announcement of a further investment in gold mining operations in Nunavut of a significant $1.5 billion, which will increase their northern workforce from 1,100 to 2,000 in this region of highest unemployment in Canada.

But the president of Agnico Eagle told the symposium that while the company wants to reduce the burning of fossil fuels and understands the importance of the imposition of a carbon price in Canada designed to encourage the use of alternative energy sources like natural gas, solar, wind or hydro-power-generated clean electricity, he told the symposium, “If you say I’m going to penalize you for using fossil fuels where there is no alternative, that’s not a policy. That’s a tax.” He said that the carbon tax, as proposed, would cost the company $20 million a year by 2023, which would jeopardize the viability of this mine in a remote area with no infrastructure and high operating costs.

I know that Nunavut has agreed under the pan-Canadian climate strategy to accept carbon pricing, which would otherwise be imposed, but there were commitments to try to accommodate Nunavut’s and the territories’ unique needs in designing a revenue-neutral carbon pricing system.

I would like to ask the Government Representative in the Senate: The carbon tax is set to come into place in 2018. Territorial legislation will be required. Nunavut is in its last year before a territorial election in the fall. What is the status of discussions between Canada and Nunavut on accommodating Nunavut’s unique needs, and is consideration being given to delaying the imposition of a carbon tax if progress is slow, as I understand is the case in discussions between officials? Also, is the exemption of emission-intensive jobs-creating industries like mining, where no alternative energy options are available, being considered as an option?

Hon. Peter Harder (Government Representative in the Senate): I thank the honourable senator for his question. As his question indicates, the Government of Nunavut is a signatory to the agreement. Appropriately, specific circumstances of the North need to be discussed and agreed upon between the Government of Canada and the Government of Nunavut.

I’m not aware the specific project you refer to, but I would be happy to update the house and the honourable senator with respect to both the state of negotiations and whether and how the specific company to which he refers is being looked at.

Nunavut—Carbon Tax

(Response to question raised by the Honourable Dennis Glen Patterson on April 5, 2017)

The Government of Canada released the pan-Canadian approach to pricing carbon pollution in October 2016, calling for all Canadian jurisdictions to have carbon pollution pricing in place by 2018. Recognizing the unique economy and circumstances of each province and territory, the pan-Canadian approach provides provinces and territories flexibility in deciding how to implement carbon pricing – they can put a direct price on carbon pollution or they can adopt a cap-and-trade system. The provinces and territories will keep the revenues to use as they see fit — whether to give back to consumers, support their workers and their families, help the vulnerable, or otherwise.

The Pan-Canadian Framework on Clean Growth and Climate specifically recognizes the unique challenges faced by Northern and remote communities with respect to pricing carbon pollution, compared to the rest of Canada, including high costs of living and of energy, food security, and emerging economies. As indicated in the Framework, the federal government will work with the territories to find solutions to address their particular circumstances. As part of this effort, a study to assess the implications of carbon pricing for the territories is expected to be launched this spring and completed in the fall.

QP – Nunavut Carbon Tax